There have been cardholders who have dealt with various credit card debts by using credit card balance transfers. Cardholders who have multiple credit cards have, in some cases, taken those various debts and consolidated them on one credit card, typically with a lower interest rate. While credit card debt balance transfers, which work like a consolidation loan, can be beneficial for some, there are questions as to whether these types of balance transfers can be helpful to everyone or only specific cardholders.
Firstly, financial advisers have often stated that if a cardholder has poor financial practices, simply moving debts around will do little to help erase credit card obligations. By consolidating credit card debt or transferring various balances to one credit card, a cardholder has not truly erased any debt even though they now owe payments on only one card.
If a cardholder is responsible and can meet more than minimal monthly requirements, balance transfers are reported to be helpful in some cases. What this means is that if the cardholder takes various credit card debts and transfers these balances to a low interest credit card, they can benefit if they will pay off this consolidated debt before the APR increases or interest costs simply get out of hand. Some credit cards that offer a low interest on balance transfers typically do so for only a short period of time, so this must be researched before a card is chosen for a balance transfer.
However, in the end it comes down to a cardholder’s ability, and willingness, to pay as much towards their debts as they can. While combating various credit card debts can be accomplished by many cardholders, individuals who choose balance transfers typically only benefit if they focus as much money as they can on erasing their credit card debt in a short period of time. Cardholders who take care to watch their repayment timeframe and interest rates are those who have been able to transfer their credit card debts to one card and erase their debt in a way that will allow them to incur as few costs from factors like interest as possible.